Disciplined Alternative Yield Fund

C000135672 Fund Overview

Disciplined Alternative Yield Fund is a US mutual fund managed by John Hancock Funds II, categorised as Emerging Markets Blend / Core Equity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

• Type: US mutual fund
• Manager: John Hancock Funds II
• Category: Emerging Markets Blend / Core Equity
• Assets under management: $80.84M
• SEC CIK: 0001331971
• SEC series ID: S000034047
• Share class ID: C000135672

C000135672 Investment Objective and Strategy

Disciplined Alternative Yield Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by John Hancock Funds II.

Investment objective

The fund seeks long-term capital appreciation with a high degree of downside protection and reduced volatility relative to the broad U.S. equity market.

Principal investment strategy

"The fund seeks to achieve its investment objective, under normal circumstances, by primarily investing in U.S. equities and simultaneously selling a call option against those stocks. The call options will typically have a strike price lower than the current stock price, which is termed ""in the money."" This combination of long stock position and short in the money call option creates a yield instrument. Additionally, the fund can engage in writing out-of-the-money put options on U.S. equities. Writing out-of-the-money put options is analogous to buying the stock and selling the call option with the same strike price and generally achieves the same result. These two strategies are equivalent in terms of risk/reward due to put-call parity. In making investment decisions, the manager ordinarily analyzes estimates of ""intrinsic value"" (i.e., the potential downside volatility level) and correlation between such estimates and time to expiration, as well as potential returns relative to risk.

The strike price of the call options is usually set at or below the estimated intrinsic value level of the securities against which they are sold and the time to expiration of the options that the fund sells varies. The fund may also write (sell) in-the-money call options on equity indexes and/or exchange-traded funds and write call options on individual securities that it does not hold in its portfolio (i.e., naked call options). The issuers of equity securities purchased by the fund will primarily have market capitalizations in excess of $2 billion. The fund may invest in companies located both within and outside the United States (including in emerging markets). The fund may invest any percentage of assets in any one country, region or geographic area. The fund may invest in initial public offerings (IPOs) and in exchange-traded funds (ETFs).

In addition to common stocks and other equity securities (such as preferred stocks, convertible securities, and warrants), the fund may use foreign currency exchange contracts, options, stock index futures contracts, and other derivative instruments, primarily for the purpose of reducing the risks of individual equity positions and maximizing risk-adjusted returns, and may also be used to hedge broad market exposure. In addition to the use of written option contracts, the fund may use foreign currency exchange contracts, other options, stock index futures contracts, other futures and forward contracts, swap agreements, variance swaps, convertibles and reverse convertibles, and other derivative instruments for hedging purposes or to enhance return. Variance swap agreements involve an agreement by the two parties to exchange cash flows based on the measured variance (or square of volatility) of a specified underlying asset.

The fund's investment process may result in an extremely high portfolio turnover ratio."

C000135672 Costs and Fees

C000135672 costs about $159 per $10,000 invested per year in fund expenses.

• Net expense ratio: 1.59%
• Gross expense ratio: 1.60%
• Portfolio turnover: 81%
• Brokerage commissions: 21.53 bps of average net assets (SEC N-CEN)

C000135672 Cashflows

Over the 12 months to 2019-11, Disciplined Alternative Yield Fund had net outflows of $5.25M, from monthly SEC N-PORT filings.

C000135672 Debt Constituents

No individual debt constituents are reported in Disciplined Alternative Yield Fund's latest SEC N-PORT filing.

C000135672 Prospectus and SEC Filings

Official Disciplined Alternative Yield Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

• Prospectus (485BPOS) — filed 2020-01-17
• Prospectus (485BPOS) — filed 2019-01-22
• Prospectus (485BPOS) — filed 2018-01-19
• Portfolio holdings (N-PORT) — filed 2020-01-28
• Annual census (N-CEN) — filed 2019-11-14
• Annual census (N-CEN) — filed 2018-11-13

Related Funds

Other Emerging Markets Blend / Core Equity funds tracked on ABC INVEST:

• Strategic Advisers Fidelity Emerging Markets Fund (FGOMX)
• iShares MSCI South Korea ETF (EWY)
• Strategic Advisers Emerging Markets Fund (FSAMX)
• iShares MSCI Taiwan ETF (EWT)
• iShares MSCI Brazil ETF (EWZ)

Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.